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Also On Today's Agenda: Save MSP

Also On Today's Agenda: Save MSP

November 18, 2009

Also on today's legislative agenda is the Patrick administration's request for a $30 million stopgap appropriation for the Medical Security Program (MSP). We urge the legislature to approve the funds. The alternative would be loss of coverage to thousands, and the loss of hundreds of millions in federal funds. MSP provides affordable health coverage to 34,000 low-income workers on unemployment assistance. The program, which is funded by dedicated revenue from an employer assessment, will run out of money next month. Because the program receives federal reimbursement under our MassHealth waiver, it's covered by the federal requirement that states not make eligibility changes in Medicaid programs. The penalty for making changes would be the loss of hundreds of million dollars in federal Medicaid reimbursements. Any solution to the MSP funding problem will have to include an increase in the employer assessment. As pointed out in a cogent Mass Budget and Policy Center report issued yesterday, state law directs an administrative board to increase the assessment to keep pace with inflation. Yet the assessment, set initially in 1988 at $16.80 per worker annually, has never been increased. Adjusting the assessment should not be seen as increase, but rather as making up for the real decreases that employers have enjoyed, as inflation whittled away at the value of the amount over time. Yesterday's report estimates that for the assessment to be reset at its intended real value, it should now be at $56.41 per employee. Last month, a broad coalition of groups sent a letter to the Governor, urging him to bring the assessment rate in line with legislative intent (and see this blog post on the MSP, too). The Globe reported yesterday that the administrative committee empowered to increase the assessment will meet on November 30. We renew our call for the committee to follow the directive in the MSP statute and adjust the assessment as required. But because of timing and cash flow issues, the program will run dry if it doesn't get an immediate cash infusion. Any assessment increase will not provide funds quick enough to enable benefits to continue. Thus the administration has asked for a $30 appropriation from the General Fund, which may be paid back if program finances permit. It's only fair for the General Fund to bail out the MSP; back in 2001-2003, some $194 million was diverted from the MSP Fund to make up for shortfalls in other programs. We urge the legislature to approve the MSP funds today. -Brian Rosman